Market Snapshot: Canadian Propane Increasingly Destined for Asia
Release date: 2022-09-28
Propane exports from Canada have grown steadily over the past decade, spurred by strong domestic propane production and access to new markets. In 2015, Canada exported an average of 112,000 barrels per day, all to U.S. markets. In early 2017, propane started being exported directly from Canada to non-U.S. markets. By 2021, Canada exported an average of 204,000 barrels per day, increasingly to countries other than the U.S. Production has increased as natural gas producers in western Canada focus on developing new gas production rich in natural gas liquids,Definition* mostly from the Montney formation in Alberta and British Columbia (B.C.).Footnote1
Most of this export volume growth comes from overseas markets. In 2021, 132,000 barrels per day of propane went to the U.S., and 72,000 barrels per day was exported elsewhere – namely South Korea, Japan, and Mexico.Footnote2 In March 2021, exports to non-U.S. destinations reached an all-time high. In June 2021, exports to non-U.S. destinations surpassed exports to the U.S for the first time and this happened again in May 2022.
Figure 1: Monthly exports of propane from Canada, by destination
Source and Description
Source: CER – Commodity Tracking System
Description: This column chart shows monthly Canadian exports of propane from January 2017 to May 2022. The two columns shown are exports to the U.S. and exports to destinations other than the U.S. In 2017, exports to the U.S. averaged 133,000 barrels per day (Mb/d), while exports to non-U.S. destinations averaged 5.3 Mb/d. By 2021, exports to the U.S. had grown to 132 Mb/d, while exports to non-U.S. destinations had grown to an average 72 Mb/d. In May 2022, exports to the U.S. were 78.5 Mb/d while exports to non-U.S. destinations were 87.4 Mb/d.
Propane exports to non-U.S. destinations have been enabled by the completion of two propane marine export terminalsFootnote3 located near Prince Rupert, B.C. In May 2019, the exports of propane began from AltaGas’s Ridley Island Propane Export Terminal, and export volumes to non-U.S. destinations quickly ramped up as a result. In 2021, export capacity at Ridley Island doubled to 80,000 barrels per day. In 2021, propane exports began at Pembina’s 25,000 barrels per day Watson Island terminal. Propane is delivered to both terminals by rail from producers in western Canada. Canada also exports propane to Mexico by rail.
Exports of propane to the U.S. are seasonal. Between April and September, demand for propane in the U.S. is lower, so exports are also lower. In contrast, exports to non-U.S. destinations are more stable through the year.
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